CPI Up 7% for 2021

Neither this post, nor any other on cryptofal.com should be taken as financial advice.

By Crista Yamasaki

This morning's announcement from the Department of Labor reported a 7% rise in consumer price index (CPI) for 2021.   News of this, coupled with a growing level of skepticism for the Federal Reserve's confidence to contain inflation, has created more optimal conditions for the crypto market today.   

Around the same time this report was released, the overall cryptocurrency market cap increased $29 billion within a half hour, reaching $2.075 trillion.  Investors moved to hedge against the dollar and other fiat counterparts as central banks around the world continue to strategize on how to combat the inevitable rise of inflation. This increase comes as a relief to the crypto community, which saw a continuous decline in prices since the start of the new year.  

The contributing factors to this dip were largely led by the Federal Reserve’s announcement on interest rates and, to a lesser extent, last week’s conflict in Kazakhstan, which halted 18% of the Bitcoin hashrate.  While the mining operations in Kazakhstan are nearly restored, the lingering apprehension over the future rise in interest rates will present an additional test for the crypto market come March.  Stocks, bonds, and crypto might become less appealing to the average investor who will likely turn towards conventional savings accounts in the year to come, nevertheless, the crypto market continues to grow each year and endures thus far.